Collegian cash redo advances

Bill shifts bar for scholarships, too

The Arkansas House of Representatives on Thursday night voted to cut the size of lottery-financed scholarships for future recipients during the first year of college and change the eligibility requirements for the scholarships starting in the 2016-2017 school year.

The House also approved a bill that would require the Arkansas Department of Higher Education to award the scholarships on the basis of credit hours instead of academic year.

In a 64-23 vote, the House approved Senate Bill 5 by Sen. Jimmy Hickey, R-Texarkana, which would cut the size of the scholarships in the first year of college and change the eligibility requirements. It goes back to the Senate for concurrence with the House-approved amendment.

Hickey backs the amended version and will encourage his colleagues to vote for it. The Senate voted for the previous version 22 to 12 on March 9.

Supporters say SB5 will shift scholarship money to students who are successfully completing their studies.

State Rep. Charlotte Douglas, R-Alma, said she would rather trim the Arkansas Academic Challenge Scholarship for students' first years and increase it during the second year rather than increase general revenue for the scholarships or do nothing to fix the program's financial problems.

"This is a fix temporarily, and [its implementation] is put off for a year," Douglas told her fellow representatives. "In the meantime, we are going to look for other solutions."

The Arkansas Academic Challenge Scholarship is financed through the lottery's net proceeds and $20 million a year in state general revenue. There's also a $20 million lottery reserve fund that is used to counter temporary cash-flow shortfalls regarding the payment of scholarships and the receipt of lottery net proceeds.

Ticket sales and net proceeds have declined each of the past two fiscal years. More than 30,000 students have received these scholarships during each of the past five fiscal years.

Under SB5, starting in the 2016-17 academic year, the scholarship would be reduced from $2,000 to $1,000 for the freshman year at two and four-year colleges. The scholarships would increase from $3,000 to $4,000 for the sophomore year at four-year colleges, and from $2,000 to $3,000 for the sophomore year at two-year colleges.

Scholarship recipients would receive $4,000 as juniors and $5,000 as seniors at four-year universities.

"What we are doing is incentivizing the students to do well in that first year and not dropout," Douglas said.

SB5 also would change the scholarship's eligibility requirements. Future high school graduates would be required to have ACT scores of at least 19 or the equivalent on comparable college entrance exams.

Under current state law, high school graduates are required to have successfully completed the Smart Core curriculum and achieved either a high school grade-point average of at least 2.5 or a minimum score of 19 on the ACT or the equivalent.

"It will hurt the ones who have not done the preparation and taken the college-preparatory classes," Douglas said.

But Rep. Charles Blake, D-Little Rock, said it is "extremely unfair" to disregard the achievement of a high school graduate with a grade-point average above 2.5 simply because of one test score and "put more of a value on the ACT score of 19, especially when we have low-income students who are able to take the ACT only once.

"We are putting more of a value on one Saturday of testing," he said.

But with the lottery now under the control of the governor's office, Rep. Chris Richey, D-Helena-West Helena, said, "I hope that we can begin to turn around the proceeds from the lottery that goes to the scholarship and adequately fund the lottery scholarship.

"I hope we see progress in that direction in the next year," Richey said.

"In addition, we are going to use this next year to come up with a more comprehensive, more long-term solution to this problem, so that every two years we are not back in here having to vote on cutting scholarships again because we are not making enough money from the lottery," said Richey, who is co-chairman of the Legislature's lottery oversight committee.

"This basically becomes the backup plan if we can't come up with something else," he said about SB5. "We are going to have to have [some solution], or we are going to have a funding crisis in a couple of years."

In addition to changing the start date, the House-approved amendment also adds language regarding the Scholarship Shortfall Reserve Trust Account.

The amendment specifies that any loan from the General Improvement Fund to keep the scholarship program solvent before the changes go into effect should not exceed $1.5 million.

SB5 wasn't the only lottery scholarship bill on the House agenda Thursday.

Under House Bill 1779 by Rep. Dwight Tosh, R-Jonesboro, and Rep. Andy Davis, R-Little Rock, a student who is in his second year of college but who has taken enough credits to qualify as a junior could receive a scholarship equal to those received by third-year students. Lottery scholarships, under the bill, increase incrementally on the basis of what academic year a student is in.

The House voted 77-0 to approve HB1779, which goes to the Senate.

The legislation's sponsors said they proposed it because the current scholarship system inadvertently punishes students who take college classes in the senior year of high school or summer classes to earn extra credits and graduate quicker. Right now, regardless of the number of credits a student has, if he is in his first full-time year of college, he would receive the lowest freshman award.

Under HB1779, the Department of Higher Education would be required to look at that student's transcript and decide whether he had enough credit hours to be considered for the higher, second-year award.

The proposed system would award first-year scholarship amounts to students who have between zero and 27 hours of college credits; second-year amounts to students with 27-57 hours of credit; third-year amounts for 57-87 credit hours; and fourth-year amounts for 87-120 hours.

Tosh amended his bill late Wednesday at the request of the Department of Higher Education so the legislation would not go into effect for all students until the 2016-17 school year. The department asked for the extra time to adjust the system and test any changes that need to be made.

But under the legislation, if it were to pass, individual students would be allowed to request reviews of their award amounts this year to receive the higher amount if they have enough credit hours. Department of Higher Education officials cautioned that once students reach 120 hours, they are no longer eligible for the scholarship, even if they continue for another year to get a second degree or change majors.

Metro on 03/27/2015

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